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Last week was a bearish week in the grain complex as corn, beans and wheat all closed lower. Beans led the way, down 45 cents since Monday. They felt hedge pressure in Brazil as the truck strike came to an end. In addition the weak Real continued to give the Brazilian farmer a good price despite the break in futures.

WEEKLY REAL - 3.05

In Brz real, SK is up about 18% up from the Jan low compared to the board up about 2%.

The story of the week remained the strong jobs report which showed a gain of 295,000 (well above expectations), pushing the unemployment rate down to 5.5%. After the report, the dollar rose to an 11 year high against the world’s major currencies and U.S. bond yields jumped. This also caused U.S. stocks to trade lower as it may force the Fed to raise interest rates sooner than expected. This, combined with the continued strength of the U.S. dollar, put pressure on the commodities and gave a strong fundamental reason why commodities were on the defensive last week.

Dollar climbs to 11-year high after U.S. jobs data

60 minute chart

Daily Dollar Chart

Corn is a little higher today, but still continues its range-bound trade with a lack of any significant fundamental developments. Wheat is higher today after trading to new contract lows which have held since September. The strong U.S. dollar against the Euro will continue to keep wheat exports down while giving Europe a bigger advantage in global markets.